The Taiwanese chipmaker TSMC is projected to lift its third‑quarter profit by about 28 percent, driven by the huge surge in demand for AI‑related chips. Analysts see the company’s earnings jumping from a net profit of roughly S$5.9 billion last year to nearly S$7.6 billion this quarter.
The boost comes as big data centers and cloud‑service providers rush to build out AI models. “We’re seeing a strong wave of activity in the AI market,” said Thomas Tien, TSMC’s chief operating officer, in a recent earnings call. “Every one of our key customers is expanding their orders for 5‑nanometer and 3‑nanometer nodes, which are the most advanced technologies for AI workloads.”
TSMC’s 5 nanometer (N5) and 3 nanometer (N3) processes are highly sought after for machine‑learning accelerators and other AI processors. The company has been ramping up production capacity at its Fab 18 and Fab 5 facilities to meet the pace of orders. Its biggest clients, including Nvidia, Amazon Web Services and Google, are shipping shipments worth billions of dollars for the next two years.
While the overall semiconductor market remains cyclical, TSMC’s business model—providing foundry services for a broad range of customers—insulates it from the volatility that has seen some of its rivals struggle. The firm’s quarterly guidance points to stronger balance sheet metrics, with a cash‑flow margin projected to improve to 45 percent from 39 percent in the previous period.
Investors welcomed the forecast, sending the stock higher ahead of the earnings announcement on Tuesday. A more than 20‑percent rally in the past month reflects growing confidence that AI will continue to drive chip demand and push TSMC’s earnings higher in the coming quarters.
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